New Zealand is a big country - at 268,000sq km we are bigger than the United Kingdom; we are 67 per cent the size of Germany, 72 per cent the size of Japan. Our coastline is longer than both mainland USA and mainland China. Our economic zone is more than half the size of Australia. But these countries have far greater populations than we do. Demographics drive a lot in any country, any economy.

We have to get over this small-country mentality and mindset and back ourselves more. Some are simply having the wrong discussion - is growth good? Yes it is. The question for New Zealand is not about whether we grow, but how we grow.

Human capability is critical to all parts of our community and economy. In most parts of New Zealand, except Auckland, the population is flat or in decline. And like all the other slow-growth, indebted countries, we also have an ageing population. There are not enough people to produce the exports, provide the services, pay the taxes and build a future at first-world income levels.

We simply need more people.

But we need to be smart about it, in two ways.

First, we need to take the lid off our cities. When driving along Manukau Rd to come into Auckland CBD from the airport, it seams like the tallest building is a corner dairy. We should stop building out and start build up. Perhaps Manukau Rd needs to have 200-300 buildings 8- 30 storeys, and then run a monorail down the middle to the airport. Wellington is doing a pretty good job of "Manhattanising" around Courtenay Place. Surely Auckland is capable of similar. With forecast of another million people, there simply needs to be more density of population per square km.

This would mean:

1. We stop gobbling up productive land - we've already lost 30 per cent over the past 30 years to urban sprawl and the conservation estate - now 35 per cent of NZ.

2. It means Auckland might have some chance of becoming a green or even an international city. Right now Auckland has no chance of doing either. It's a series of little low-level villages. It simply can't be compared to Paris, Singapore, New York or London. The strategy seems to be to spread it out all the way to Taumarunui. It needs less traffic congestion, more public transport, better utilisation of resources, more integrated and diverse communities. To do this it simply has to go up, not out. Public transport will never work unless there are far more people in far less space.

3. And it means more affordable housing, so home ownership becomes a reality, not just a dream. Instead of 3 bedrooms on a 400m section you might have 20 to 120, which would make the land component per bedroom somewhat less in theory.

We need to be smart and spread the population growth across the country. This means investing in networks such as broadband, water, science, roads, public transport, energy and housing right across the nation, not just Auckland. It's important for New Zealand that Auckland is successful, but Auckland is not New Zealand. It is but one part of New Zealand.

So we need to increase our population in smart ways and we have got to stop thinking like a small country. Taking the lid off Auckland is an obvious next step.